Romania: Amendments to the Fiscal Code

A Government Ordinance published at the beginning of September brought further amendments to the Fiscal Code and among others the following changes.

General provisions. The obligation to register contracts concluded with non-resident legal entities and non-resident individuals for services provided in Romania has been extended to resident individuals and Romanian permanent establishments of non-resident entities. The provision will enter into force on 1 January 2012.

Corporate Profits Tax. Partnerships with legal personality established according to the legislation of another state that are performing activities in Romania fall under the existing tax treatment applicable to partnerships without legal personality set up under the Romanian legislation. This rule enters into force on 1 January 2012.

With some exceptions (e.g. banks, non-profit organisations, taxpayers deriving most of their income from agriculture, etc.), as of 1 January 2013, taxpayers may opt to declare and pay the annual profit tax by making quarterly advanced payments. Such an option has to be transmitted by 31 January of the fiscal year for which the taxpayer wants to apply it and has to be kept for at least two years.

Quarterly advance payments represent a quarter of the profit tax due for the previous year, updated with consumer index prices. The consumer index prices will be published in a Ministry of Finance Order by 15 April of the year for which the anticipated payments are made. The annual income statement has to be submitted by 25 March of the following year. Profit tax due for 2011 has to be declared and paid according to the provisions in force up to 31 December 2011.

Personal Income Tax. The three year exclusion period before non-resident individuals meeting residency requirements become taxable in Romania on their worldwide income has been reduced to one year only.

Value added tax. The new deadline for the completion and submission of the Recapitulative Statement will be the twenty-fifth of the month following the month to which the statement relates.

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